Review of Operation Sunlight

Operation Sunlight is the Government’s reform agenda to promote good governance practices and improve the openness and transparency of public sector budgetary and financial management.

Operation Sunlight has six key objectives:

  1. Tightening the outcomes and outputs framework.
  2. Changing the Budget Papers to improve their readability and usefulness.
  3. Improving the transparency of estimates.
  4. Expanding the reach of budget reporting.
  5. Improving inter-generational reporting.
  6. Improving the financial framework.

On 9 December 2008 the Government released the Murray Report on budget transparency issues and the Government’s response to the report and its recommendations.  The Government also re-released the Operation Sunlight – Enhancing Budget Transparency document which has been updated.

The Murray Report

The Murray Report was presented to the Minister for Finance and Deregulation, Lindsay Tanner MP in June 2008.  It was prepared by the then Senator Andrew Murray to review budget transparency issues as part of Operation Sunlight.  The report contained 45 recommendations on ways to improve transparency and the Government’s relationship with Parliament.  The Government released its detailed response to the  recommendations, agreeing (fully or in part) to 21 of these.

Some of the future reforms recommended by Andrew Murray and which are now incorporated under Operation Sunlight include:

  • The Government will require agencies to report expenditure and non-financial information at the program level in their Portfolio Budget Statements from the 2009-10 Budget (Recommendation 9).
  • The Department of Finance and Deregulation (Finance), in consultation with the Australian National Audit Office and other stakeholders, will issue revised guidance on the Administered/Departmental classification system to improve transparency and consistency in budgeting and accounting in late 2008 (Recommendation 10).
  • Further transparency on the use of Special Accounts will be provided through the inclusion of a register and the provision of financial estimates in Budget Paper 4 from the 2009-10 Budget.  This will complement the end of financial year audited financial information that is already reported to Parliament (Recommendation 13).
  • The Minister for Finance and Deregulation will issue revised guidance to enhance reporting in agencies’ financial statements from the 2009-10 financial year to ensure that transfers of amounts between different forms of appropriation are reported to the Parliament in agencies’ financial statements (Recommendation 14).
  • The current practice of providing funding for depreciation will be phased out from the 2009-10 Budget (Recommendation 15).
  • A new and more comprehensive report to the Parliament on the use of the Advance to the Finance Minister and the Advance to the Presiding Officer will be introduced commencing from the 2008-09 financial year (Recommendation 18).
  • The Intergenerational Report will be produced once per parliamentary term (Recommendation 26).
  • Agencies will implement newly devised or revised outcome statements for the 2009-10 Budget to provide more meaningful descriptions of the outcomes that are to be achieved from Government programs (Recommendation 40).

The Government as part of its Operation Sunlight initiative has already made a number of significant improvements to Budget transparency and accountability including:

  • recognising, for the first time, the Goods and Services Tax (GST) as a Commonwealth tax commencing with the 2006-07 Consolidated Financial Statements and the 2007-08 Final Budget Outcome (Recommendation 24);
  • producing a single set of financial statements under Australian Accounting Standard AAS1049 and including the statements in the Budget Papers for 2008-09, replacing three financial statements prepared on different bases that were published in Budget Papers in previous years (Recommendation 24); and
  • improving and redesigning the Portfolio Budget Statements presented to Parliament (Recommendation 14).

Lindsay Tanner, Minister for Finance and Deregulation said: “The Government has considered Andrew Murray’s recommendations, the vast majority of which we are either taking up in their entirety or incorporating the underlying themes into other initiatives.”

“Recognising the importance of the Operation Sunlight agenda, the Government has provided funding to portfolio departments to assist with the implementation of these reforms within each portfolio”.

The original Operation Sunlight document has been updated to include the recommendations of the Murray Report.

Andrew Murray’s full report, together with the Government’s response, and the updated Operation Sunlight document are available on the Department of Finance and Deregulation website.

The Minister’s media release is available here.